The hidden costs of a cellular chargeback

It’s a dirty word…chargebacks, but as they say it comes with the territory. For cellular dealers, especially those new to the business, chargebacks can cause huge surprises and problems for their business. Giveth, then taketh away. That’s what happens. So your wireless sales representative activates a customer on a new wireless plan. The customer buys the fancy new phone with all the bells and whistles. The customer is happy, the sales rep is happy, and you are happy. But…3 months later the customer doesn’t pay their bill and gets shut off. Ding, ding! Cha ching.

Your dealer agreement states that the carrier can charge you back for up to 180 days (6 months) if the customer does not stay on their network. So next commission run, your commission on that sale is charged back. You are out the money.

But wait, what about the phone? It cost hundreds of dollars, and you paid for it. But wait…what about the commission you paid to the sales rep? That’s also come out of your pocket. Freight on the phone you shipped to the store. Gone. Cost to process the transaction, paperwork, time. Gone. How about in the case where the customer returned the phone…you got the phone back, but now you have to return the phone, spend the money on freight, spend the time to process, look for the credit on the equipment, and so on. That’s why at ExpertCommissions, we say…”the best kind of chargeback is the one that never happens!”